Stocks
49 Companies including Khan Brothers, Khulna Printings Move to ‘Z’ Category
Amidst the global impact of the COVID-19 pandemic, Bangladesh’s stock market witnessed a downturn, leading to the closure of various enterprises, both big and small. As a result, several companies failed to distribute dividends to their investors. Responding to this economic challenge, the Bangladesh Securities and Exchange Commission (BSEC) issued directives on September 1, 2020, to categorize companies facing profit distribution difficulties. According to the directive, if a company fails to announce or distribute dividends within the fiscal year, its category will be altered.
However, this provision grants affected companies only a brief respite, lasting a few days. Those companies unable to fulfill their dividend commitments by February 28 will undergo a categorical change as per the BSEC’s directive, impacting their shareholder dynamics significantly. Notably, companies engaging in trading activities on the Dhaka Stock Exchange (DSE) under ‘A’ and ‘B’ categories, despite not distributing dividends, currently remain outside the ‘Z’ category, comprising companies that have failed to pay dividends.
As of now, there are 49 such companies still operating within the ‘A’ and ‘B’ categories on the DSE, set to be reclassified as ‘Z’ category entities after February 28. The regulatory authority, BSEC, has been closely monitoring companies with weak stock shares, subjecting them to continuous surveillance. Brokering firms receiving sell (offer) and buy (demand) orders are currently under scrutiny by the regulatory body.
Recently, Dhaka Stock Exchange (DSE) has flagged concerns over Khan Brothers’ share price fluctuations and the closure of Khulna Printing’s factory. Simultaneously, 39 scrutinized companies, including Khan Brothers, Khulna Printing, Central Pharmaceuticals, Intech Limited, Keya Cosmetics, Active Fine, AFC Agro Biotech Limited, Alhaj Textile, Alltex Industries, Anlima Yarn Dyeing, Aramit Cement, Atlas Bangladesh, Aziz Pipes, Bangas, Bangladesh Building Systems (BBS), BD Thai Aluminum, Dhaka Dyeing, Delta Spinning, Far Chemicals, FAS Finance, Global Heavy Chemicals, Indo-Bangla Pharmaceuticals, International Leasing, Metro Spinning, Miracle Industries, National Feed Mill, National Tea, National Tubes, Olympic Accessories, Olympic Industries, Peninsula Chittagong, Prime Textile Spinning Mills, Regent Textile, Safko Spinning, Sonargaon Textiles, Standard Ceramic, Union Capital, Western Marine Shipyard, and Zahintex Industries Limited, have been reported to the Bangladesh Securities and Exchange Commission (BSEC) for their weak share performances.
These companies are under scrutiny for engaging in transactions in the ‘B’ category despite not paying dividends. The BSEC’s surveillance aims to maintain transparency in the stock market and ensure compliance with regulations. The list of companies reported for weak share performance includes a diverse range of industries, from textiles and pharmaceuticals to finance and manufacturing. This move by the regulatory authority reflects its commitment to closely monitor companies facing challenges in the stock market.
In addition, ten companies are engaging in transactions in the ‘A’ category without distributing dividends. These companies include Kattali Textile, Makson Spinning, Malek Spinning, New Line Clothings, Renwick Jajneswar, Ring Shine Textile, Runner Automobiles PLC, Saif Powertec, Saiham Cotton Mills, and Saiham Textile Mills Limited.
As for the ‘Z’ category, according to the BSEC’s directive issued on September 1, 2020, if a company fails to provide cash dividends for two consecutive years or does not hold Annual General Meetings (AGM) within the specified timeframe, it will be transferred to the ‘Z’ group with the commission’s approval. Furthermore, if a company’s production or operations remain suspended for six months or more, or if the net cash flow from operating activities is continuously negative, or if the company’s net asset value remains higher than the paid-up capital, it will also be transferred to the ‘Z’ category.
Additionally, companies that are unable to hold AGMs due to legal reasons or face disruptions due to force majeure events will not be reclassified to the ‘Z’ category if their production remains suspended for more than six months. Moreover, the Securities Act prohibits the stock exchange from unilaterally transferring any listed company to the ‘Z’ category without the BSEC’s approval. The stock exchange will regularly review compliance with these regulations, and any company found to be non-compliant may be transferred to the ‘Z’ category or subjected to coordination with the BSEC.
On Monday (February 5), BSEC’s Executive Director and Spokesperson Mohammad Rezaul Karim informed Orthosongbad that the opportunities previously granted to companies through notifications in response to the pandemic have been revoked. Consequently, companies will now adhere to listing regulations, and any advancements or downgrades in share categories will be by the existing rules from February 28. If any weak companies are being targeted for market manipulation, the relevant department of the regulatory body is actively addressing such cases.
Before this change, if a company failed to declare dividends, its shares would be reclassified to the ‘Z’ category the next day. Similarly, if announced dividends were not sent to AGM within a month, the same decision would be taken. The regulatory measures aim to maintain the integrity of the stock market and ensure transparency in the handling of companies facing financial challenges.
According to sources, BSEC has recently issued new directives, rescinding the previous instructions issued before November 30 of the last year. The latest notification, signed by BSEC Chairman Prof. Shibli Rubayat-Ul-Islam, addresses the reclassification of companies into the ‘Z’ category.
The notification states that companies listed on the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) can now be immediately reclassified to the ‘Z’ category based on settlement or transaction regulations. Due to the BSEC’s order issued on September 1, 2020, certain companies were prevented from being transferred to the ‘Z’ category, and now, these companies are also eligible for reclassification.
The directive further mentions that companies already in the ‘Z’ category cannot engage in share trading, share transfers, or reclassification without BSEC approval. However, exemptions are provided for banks, insurance companies, and non-banking financial institutions (NBFIs), allowing their entrepreneurs or executives to participate in these activities. The new regulations are scheduled to come into effect on February 28, 2024.
Major General Mohammad Quamruzzaman (retd) has stepped down from his role as an independent director of the board of the Dhaka Stock Exchange, citing personal reasons.
He also served as a member of the DSE’s Nomination and Remuneration Committee (NRC).
Quamruzzaman was appointed to the DSE board on 1 September 2024, following the fall of the Awami League-led government. After serving for nearly one year and nine months, he submitted his resignation on Saturday (24 May).
Speaking to Quamruzzaman confirmed his resignation, saying, “Yes, I have resigned as an independent director for personal reasons.”
Md Shafiqur Rahman, Deputy General Manager of Public Relations and Publications at the DSE, said Quamruzzaman submitted a resignation letter mentioning personal reasons behind his decision.
“The DSE board will now take a decision regarding the resignation,” Shafiqur Rahman said.
He also indicated that Quamruzzaman may be planning to join another company, which could have influenced his decision to resign.
Earlier, another independent director of the DSE board, Shahnaz Sultana, also resigned from her position. She was likewise a member of the NRC.
According to the DSE annual report, Shahnaz Sultana is the CEO and Chief Consultant of FINS Alliance Risk Advisory and Consultancy and has served as the Founder and Chairperson of the WE Global Women Foundation since 2020.
The Bangladesh Securities and Exchange Commission (BSEC) has today approved appointment of Ms. Nuzhat Anwar as the new Managing Director of Dhaka Stock Exchange PLC. (DSE).
Ms. Nuzhat Anwar brings over two decades of experience in financial markets, banking, and development finance. Prior to her appointment, she worked at the International Finance Corporation (IFC), the private sector arm of the World Bank Group, where she held multiple senior leadership roles across Africa and South Asia. Her positions included Resident Representative for Liberia and Sierra Leone, Senior Country Officer for Bangladesh covering Bangladesh, Bhutan, and Nepal, and acting Cluster Manager during the COVID-19 pandemic and the subsequent transition period.
Ms. Anwar also served as an IFC Country Officer in Botswana and Namibia, where she played a key role in establishing IFC’s presence in Gaborone and advancing a sustainable investment program, including IFC’s first investment in Botswana. She offers deep expertise in capital management, treasury and liquidity, transaction services, portfolio optimization, and market advocacy. Earlier in her career, she spent 16 years with Citibank Bangladesh and Standard Chartered Bank Bangladesh in various senior management roles.
Ms. Anwar holds a Master’s degree in Commerce (Finance) from the University of Dhaka.
On her appointment as the Managing Director of DSE, the Chairman of the Board of DSE Mr. Mominul Islam said, “We are pleased to receive the approval of BSEC for appointment of Ms. Anwar as the new Managing Director. Over the last one year the NRC and Board of have worked hard to recruit a competent leader as the MD of DSE. We are confident that Ms. Anwar, with her excellent leadership trait, vast experience in the financial sector in home and abroad and deep passion for transformation in the Capital Market of the Country, is the right candidate to lead DSE in the days ahead. Now, we will complete the internal processes to onboard Ms. Anwar at soonest.”
Dhaka Stock Market DSE, Bourse on the second working day of the week, 30th September, ended with a negative performance in Indices and a hike in Turnover from the previous working session. This information is known from DSE sources.
503 crore 90 lakh taka shares were traded on this day. 22 crore 58 lakh more tradings were done in DSE today compared to the previous workday, 29th September, Shares worth Tk 481 crores 31 lakh shares were traded last time, Sunday.
The benchmark DSEX lost 33.61 points or 5,624 The Shariah-based index DSES dropped 7.36 point or 1,263 and the blue-chip index DS30 decreased by 9.57 points or 2,053.
Of the issues traded, 72 advanced, 299 declined and 25 remained unchanged.
Shahjibazar Power Company Limited ranked top gainer on DSE, the share price increased by Tk 4.00 paisa or 9.76 percent. On this day, the share was last traded at Tk 45.00 paisa.
Dhaka Electric Supply Company Limited ranked top loser on the DSE, the share price dropped by Tk 1.80 paisa or 7.56 percent. On this day, the share was last traded at Tk 22.00 paisa.
DSE topped on trade is Pragati Life Insurance Limited 25 crore 35 lakh takas of company shares have been traded.
A total of 27 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 50 lakh 42 thousand 956 shares of the companies were traded. The financial value of which is 65 crore 60 lakh taka
